Revenue cycle management (RCM) sounds like the least sexy phrase in healthcare — a back-office spreadsheet problem. It isn't. Andrew Tsang, an independent healthcare analyst and writer of the Substack Health Is Other People, with 15+ years across providers, payers, consulting, and policy, joins Stacey Richter to unpack how RCM has grown into a $200-plus-billion industry that eats roughly a third of every healthcare dollar spent — not on care, but on the fight over who pays for it. Together they trace RCM's front end, middle, and back end, and the "hot potato" that lands on whoever has the least leverage to fight back.
WHAT YOU'LL LEARN
✅ How revenue cycle management (RCM) grew into a $200-plus-billion industry — Andrew Tsang puts RCM-related market cap at roughly $217 billion, and estimates roughly a third of every healthcare dollar goes to the fight over payment, not to care
✅ The three phases of RCM (front-end eligibility and prior authorization, middle clinical coding, and back-end claims adjudication and appeals) and why the "hot potato" of financial responsibility lands on whoever has the least administrative leverage — patients, independent practices, or self-funded employers
✅ Why a routine screening colonoscopy can flip to a diagnostic procedure — and an unexpected bill — the moment a polyp is found, even though the ACA mandates the screening itself be free
✅ How the prior authorization burden (physicians average roughly 39 prior auths a week) forces independent practices to compete on administrative capacity rather than clinical outcomes, accelerating consolidation into larger health systems
✅ Why self-funded employers face their own version of the hot potato through stop-loss "lasering," where a stop-loss carrier can exclude a specific high-cost employee from coverage after a catastrophic claim
✅ Why direct contracting — agreeing on price upfront — is Andrew Tsang's proposed way to opt out of the RCM hot potato game entirely
WHY THIS MATTERS
Revenue cycle management isn't a niche back-office function — it's a $200-plus-billion economy built on claim-by-claim fights over who pays. As Stacey Richter puts it, this isn't a story about villains; it's a story about an industry built around claim-by-claim fistfights. Whoever has the least administrative leverage in any given moment — patient, independent practice, or self-funded employer — is the one who winds up eating the cost.
MENTIONED IN THIS EPISODE
Andrew Tsang's Revenue Cycle Market Landscape interactive chart and his Substack.
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00:00 Introduction to this episode.
02:13 What revenue cycle management is.
03:22 How RCM is an endless game of hot potato.
07:10 The conversation with Andrew Tsang.
08:24 Is it actually a cycle?
08:54 How big the RCM industry actually is.
09:49 Defining revenue cycle management.
12:13 Why patients may spend more time doing revenue cycle tasks than with their doctor.
17:12 Who pays and why?
19:56 An example of RCM working within something like a colonoscopy.
22:55 The worst part about this whole revenue cycle.
24:49 How RCM affects independent doctors.
29:51 How RCM affects self-funded employers and stop-loss carriers.
